Sweden to become the first cashless society

Sweden to become the first cashless society

A century ago, Sweden was among the poorest countries in Europe, while today, it managed to climb up to the top spot along with world's most innovativ

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A century ago, Sweden was among the poorest countries in Europe, while today, it managed to climb up to the top spot along with world’s most innovative countries. The economic system they’re using is currently one of the most sophisticated systems used worldwide, preparing individuals from a young age to face the modern social economy.

Now, once again, Sweden take a leap forward being the first country to start achieving a cashless state of society.

Sweden enjoys a recent history of innovations, including exceptional student programmes, high technology structures and a better quality of life in general. The country is already basing 80% of the transaction on electronic means, while reports say that most citizens have not used cash for at least a month. Sweden seeks to make the next step and jump from cash to debit cards.

Their goal for the country is to be cash-free by 2023, and they have already partially achieved that, as between 2012 and 2020, cash in circulation decline from -20% to -50%.

A study conducted by Sweden’s KTH Royal Institute of Technology shows how there are less than 80 billion Swedish crowns (krona) in circulation; a decrease from SEK106 billion six years ago. The whole concept works for them because of the trust put in their system, the banks, the authorities and the government respectively.

“We are a small country that has had a very stable democracy for a long time. For us, it’s no problem that the money is only visible on an internet site – we trust it.” says researcher Niklas Arvidsson of KTH.

Swedes mainly use debit cards with pin numbers for security, as well as a mobile direct payment application named Swish, the result of collaboration between major Swedish and Danish banks. In fact, so many people are ‘swishing’ now that the app is credited for the reduction of cash circulating in Sweden, according to the study mentioned above. There is also iZettle, a mobile payment solution for small businesses, allowing them to operate cash-free.

While people of all age are able to use electronic means of payments, and that includes children of young age getting their pocket money in debit cards, it is not easy for everyone to adapt to the new system. Some elder people still prefer using cash for knowing how much money they have when they leave their house, how much they can spend and how much they return with. Moreover, there is a number of small businesses that prefer payments to be performed in cash, saying that the bank fees are too high for them to afford pure card transactions.

The future is now and Sweden seems to be the country leading the way to a different and better tomorrow. The infrastructure Sweden enjoys is missing from the majority of the rest of the countries, making Sweden the ideal country for such drastic innovations.

It is not clear whether the new system will completely rely on debit cards and/or other traditional banking systems, or the Swedish government plans on using blockchain technology as mentioned previously this year, where official announcements wanted the regulators testing IOTA Foundation’s network, The Tangle, among other blockchain-platforms in order to understand how it could help them transfer their economy into a new digital version of e-crown.